How uni-max increased profit by more than 30% with dynamic pricing

Case study summary

Client since
01/2021

Client's goal
Profit increase, new client acquisition

Provided services
Introduction of dynamic pricing processes, minimum margin compliance, monitoring and analysis of competition, revaluation of non-competitive goods

Results
32% profit increase, 29% increase in new client orders after the first three months

The uni-max faced problems with suboptimal prices and difficulty in updating them. At the same they time wanted to be able to se quickly price discounts on selected products to acquire new customers. Initially they managed the prices manually in excel, with occasional checks on competitors' prices. They then tried to automate pricing through a low-cost solution, but this was not satisfactory in terms of accuracy and functionality. Therefore, uni-max chose Disivo as their advanced pricing solution.

As part of the training and initial setup, we consulted Uni-max and together we have chosen a strategy that was designed to help them achieve their goals - increased profits and easier acquisition of new customers. After the first three months, there was a 32% increase in profits and a 29% increase in new orders.

The project is led by
Martin Svoboda | Head of Marketing

One of the oldest players in the professional and hobby tool segment has always relied on technical innovations, and launched its first online store in 1998. This is also why two years ago uni-max decided to try a tool for tracking competitive product prices. However, its use was not ideal, the tool was still in its infancy, had many bugs and proved insufficient for uni-max's use. So, in uni-max they worked with price by testing different price points.

"We tested clients' sensitivity to price. We took a product, set a price for a week, then tried a different price for a week, then a third price. We watched what that did to sales or margins. This was to see at what price levels that product was giving us the biggest absolute margin. This was systematic, but quite expensive to operate and maintain," says Martin Svoboda, Head of Marketing.

But after nine months, they returned to monitoring of the competition. The initial problems were eliminated and the tool worked much better.

Why did Uni-max change their pricing strategy?

Today, manual repricing is very obsolete and time expensive. That's why we looked for other ways

They found a lowcost tool for dynamic pricing. After testing it, Uni-max found out that it's too simple.

In the end, Uni-max got an offer from Disivo to combine price monitoring and dynamic pricing into a single app.

"During a few meeting we clarified the technical details, overcame the usual 'birth pains' in the form of integrations between the online store, Disivo and the ERP system and successfully launched Disivo in January 2021," says Martin Svoboda, who uses Disivo himself.

"Disivo is so easy to use, UI is really nice. On top of that your customer success is very active and helpful" adds Martin Svoboda.

What is their experience after using Disivo for several months?

We knew that we were selling some products very expensive compared to our competitors and others relatively cheap, but of course we didn't have an overview of the whole range. With 10,000 products, you just can't manage pricing in a manual way..

Disivo came up with an interesting solution, which we tested and evaluated. It has a positive impacton our financials.

We were a bit reluctant to forecast a concrete financial benefit, because before the implementation you pointed out hat the benefits might not be visible for a few months." Martin Svoboda adds and continues:

For a couple of categories, we knew that we were too expensive. We used Disivo to set up repricing strategies based on stock, purchase prices and competition prices. That led to decrease of our prices and unit margin. But thanks to huge increase in turnover, total profit increased a lot.

For products that got more expensive, we didn't observe decrease in sales. This way, we also increased our profit.

What else has Disivo brought and what do they use it for, besides monitoring the competition and automatic repricing?

For us it's not just about increasing total profit - even though that's the main goal in the long run. We are using Disivo for for a new clients' acquisition. We tried many strategies when it comes to acquisition strategy, but it didn't work that well. Until now.

Instead of investing a lot of money into brand campaigns, we decided to choose a couple of key categories and be visible as a cheapest on the market. We understand that we won't turn immediate profit on it. But it's great for remarketing and other strategies.

It's the acquisition goal - acquire a new customer and turn profit when they order the next time.

"So far so good" says Martin Svoboda. Increase of new orders in comparison to a previous year is already notable.

And what does Uni-max plans next?

"We plan to add additional products to automated repricing - including our own products. That's even more interesting opportunity. You can't really match a competitor's price to your own product. That's why we will explore other options that Disivo offers. Automated models are built exactly for that.

Product that has visitors but no sales will decrease its price. But if there are sales, price algorithms will increase the price.

That way, we will soon be able to reprice our whole portfolio of tens of thousands"

What advice would you give to companies facing a decision, whether to choose Disivo?

Customer will always be price sensitive. Always was and always will be. They have many tools to choose the best online store. That's why dynamic pricing makes so much sense. It's the competitive advantage to have.

Martin Svoboda, Head of Marketing

A bit of history

Uni-max tools and workshop equipment have been on the market since the 1990s. The company started in the era of mail order catalogues, VHS tapes and Premek Podlaha. Its founder, Kamil Hrbáček, bought a lathe in the 80s and started his own production and still manufactures and sells some products today. For example, the blasting gun was one of the first items in the portfolio, which today numbers over 10 thousand products. The story of the first flat advertisement, which cost three thousand CZK at a time when the average salary was 1,500 CZK, is also linked to this gun. Nevertheless, Kamil Hrbáček decided to invest in it, ordered it, paid for it and bought an answering machine for his landline at home. He had to be at school during the day. Before the ad went out, he had calculated that if he got twenty orders out of it, the ad would pay for itself. The first day there were three orders on the phone, the second day nine, and the third day 54 orders. Then the answering machine stopped working because it ran out of tape. Such were the beginnings of the 2016 SHOPROKU and 2017 SHOPROKU Quality Award winner.

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